CF Industries (NYSE:CF) stock appears appealing – making it a wise choice to buy at its present price of approximately $100. Despite some concerns regarding CF stock, it seems attractive given its current valuation, which appears to be very low.
We reach our conclusion by juxtaposing the current valuation of CF stock with its operational performance in recent years as well as its present and historical financial state. Our review of CF Industries along key metrics of Growth, Profitability, Financial Stability, and Downturn Resilience indicates that the company has a moderate operational performance and financial health, as outlined below. Nevertheless, for investors desiring less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative – having outperformed the S&P 500 and delivered returns exceeding 91% since its inception.
What Does CF Industries’ Valuation Look Like Compared to The S&P 500?
Based on the cost per dollar of sales or profit, CF stock appears inexpensive in comparison to the wider market.
• CF Industries has a price-to-sales (P/S) ratio of 2.6 compared to a figure of 3.0 for the S&P 500
• Furthermore, the company’s price-to-free cash flow (P/FCF) ratio is 6.6 as opposed to 20.5 for the S&P 500
• Additionally, it has a price-to-earnings (P/E) ratio of 11.8 in contrast to the benchmark’s 26.4
How Have CF Industries’ Revenues Evolved Over Recent Years?
CF Industries’ Revenues have seen marginal growth over the past few years.
• CF Industries has experienced its top line contracting at an average rate of 5.6% over the last 3 years (versus an increase of 5.5% for the S&P 500)
• Its revenues have increased by 0.7% from $6.1 Bil to $6.1 Bil in the past 12 months (compared to a growth of 5.5% for the S&P 500)
• Additionally, its quarterly revenues rose by 13.1% to $1.7 Bil in the most recent quarter from $1.5 Bil a year prior (versus a 4.8% improvement for the S&P 500)
How Profitable Is CF Industries?
CF Industries’ profit margins are significantly higher than most companies in the Trefis coverage spectrum.
• CF Industries’ Operating Income over the last four quarters was $1.9 Bil, reflecting a high Operating Margin of 30.7% (versus 13.2% for the S&P 500)
• CF Industries’ Operating Cash Flow (OCF) during this period was $2.4 Bil, indicating a high OCF Margin of 39.4% (compared to 14.9% for the S&P 500)
• For the last four-quarter span, CF Industries’ Net Income was $1.3 Bil – suggesting a high Net Income Margin of 21.8% (compared to 11.6% for the S&P 500)
Does CF Industries Seem Financially Stable?
CF Industries’ balance sheet appears robust.
• CF Industries’ Debt figure was $3.3 Bil at the conclusion of the most recent quarter, while its market capitalization stands at $17 Bil (as of 6/13/2025). This results in a moderate Debt-to-Equity Ratio of 20.8%(versus 19.9% for the S&P 500). [Note: A lower Debt-to-Equity Ratio is preferable]
• Cash (including cash equivalents) constitutes $1.4 Bil of the $13 Bil in Total Assets for CF Industries. This yields a strong Cash-to-Assets Ratio of 10.6% (versus 13.8% for the S&P 500)
How Resilient Is CF Stock In A Downturn?
CF stock has performed worse than the benchmark S&P 500 index during several recent downturns.
Inflation Shock (2022)
• CF stock fell 49.1% from a peak of $118.35 on 26 August 2022 to $60.24 on 1 June 2023, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock is still not back to its pre-Crisis high
• The highest price the stock has reached since then is 99.93 on 15 June 2025
Covid Pandemic (2020)
• CF stock declined 55.7% from a peak of $47.74 on 1 January 2020 to $21.14 on 18 March 2020, in comparison to a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully bounced back to its pre-Crisis peak by 24 February 2021
Global Financial Crisis (2008)
• CF stock dropped 76.8% from a peak of $33.92 on 17 June 2008 to $7.88 on 20 November 2008, as opposed to a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 15 August 2011
Putting All The Pieces Together: What It Means For CF Stock
In summary, CF Industries’ performance across the aforementioned parameters is as follows:
• Growth: Neutral
• Profitability: Very Strong
• Financial Stability: Strong
• Downturn Resilience: Very Weak
• Overall: Neutral
Considering its very low valuation, this renders the stock attractive, reinforcing our conclusion that CF is a wise investment choice.
Although CF stock appears promising, investing in a lone stock can be precarious. Conversely, the Trefis High Quality (HQ) Portfolio, featuring a collection of 30 stocks, has demonstrated a history of comfortably surpassing the S&P 500 over the previous four-year duration. Why is that? Collectively, HQ Portfolio stocks offered superior returns with diminished risk in comparison to the benchmark index; resulting in a smoother investment journey, as evidenced by HQ Portfolio performance metrics.
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